Sen. Elizabeth Warren, D-Mass., pressed regulators and the Federal Reserve on Thursday to tell her how the government shutdown is affecting their ability to police the economy and markets.
Warren told Securities and Exchange Commission Chairman Jay Clayton, Commodity Futures Trading Commission Chairman Christopher Giancarlo and Fed Chairman Jerome Powell in her letters that she’s worried about how the longest shutdown in U.S. history, now in its 34th day, is affecting regulators’ ability to do their jobs, and queried how they’d proceed in light of reports that a recession looms if the shutdown continues.
“As the shutdown continues and the economy is destabilized, your agencies’ roles will become even more important,” Warren wrote. “It is important that I fully understand the difficulties facing your agencies and the implications of a prolonged government shutdown.”
The SEC and CFTC, Warren noted, have been operating with limited staff since late December. Meanwhile, the Fed, which is not subject to congressional appropriations, has not been receiving “crucial” reports, including updated GDP growth numbers from the Commerce Department due to the shutdown.
Warren noted the upcoming Federal Open Market Committee meeting on Tuesday and Wednesday and cited Powell’s reported concern over the impact of a lack of data on the Fed’s ability to make economic decisions.
Citing reports, Warren pointed the shutdown’s impact on the SEC, noting that “virtually all SEC activities have ceased or decreased significantly,” with enforcement actions slowing “to a trickle” and the agency’s Office of Compliance Inspections and Examinations unable to travel to firms for onsite visits.
Warren requested that Clayton and Giancarlo answer her questions by Feb. 2, and that Powell respond by Jan. 28, prior to the next FOMC meeting.
“The January meeting may be especially crucial if the economy is beginning to face headwinds and uncertainty caused by the shutdown,” Warren stated.
Besides wanting a list of data or economic reports that the Federal Reserve has not received due to the shutdown, Warren queried Powell on what impact the shutdown will have on the Fed’s ability to make economic decisions if the government is reopened prior to the FOMC meeting.
“Please describe any backlog of data, any potential delays in regaining insight into the economy, and all other potential issues with recovering from shutdown-induced problems,” Warren stated.
Meanwhile, the House Ways and Means Committee’s Thursday hearing on the shutdown was canceled, as Treasury Secretary Steve Mnuchin refused to testify.
In canceling the hearing, Rep. Richard Neal, D-Mass., the chairman of the committee, stated that “as the government shutdown moves into its second month, Ways & Means members have many urgent concerns they’d like to raise with Treasury Secretary Mnuchin.”
He continued, ”With tax filing season beginning in five days and the timely issuing of taxpayer refunds at stake, we need to hear directly from the secretary to gain greater clarity regarding the IRS’ capabilities during the shutdown.”
Reports, Neal went on, “indicate the agency is unprepared. We are also extremely worried about the well-being of the more than 70,000 Treasury employees who are about to miss their second paycheck in a row, including 45,000 employees who are expected to work without pay. We expect the secretary to come answer our questions in the very near future.”